Ad-comm Group “Whitebook”: Cross-marketing Platform for Luxury Brands in Japan
1. What is a Whitebook? What role(s) does it play in the Marketing strategy of Ad-comm’s client companies? Answers 15 lines maximum. Whitebook is a cross marketing platform, a magazine that is published in Japan every 4 months and which displays nine luxury brands in nine diverse types of product. The magazine is customized for each luxury sponsors. The Whitebook plays an important role in terms of marketing strategy as it is a brand ambassador and CRM tool. As the Whitebook is mainly distributed through sponsors, the Whitebook targets a prequalified small group of costumers but right ones, right at the beginning. Being displayed in the magazine can be seen a recognition of being a top luxury brand and be therefore an award. The Magazine creates a strong relationship between the brands and the costumers, as the costumers feel privileged to receive special attention from the brand. Moreover the Whitebook organizes event as well, which gathers customers and one brand. Those events gives the opportunity for luxury brands to create a personal relationship (“face-to-face” relationship) with its customers, by telling its heritage and answering questions.
2. Take the perspective of the general manager of Porsche Japan. How would you assess the cost effectiveness or ROI of investing 20 million Yen a year to sponsor Whitbook? Would you be willing to be a sponsor? Why or why not? Answer by using a break-even analysis, and by calculating the expected customer lifetime value (i.e. today’s expected value of a customer’s purchases over the course of his/her life as a Porsche customer). 1 to 2 pages. a. You must know what a break-even analysis is: this is when your return/revenue covers your investment - in other words: how many cars to sell to repay for the investment in Whitebook? b. Customer Lifetime value: refer to the last class definition - expected value of a customer over the course of his/her life as a customer = selling price of a Porsche x number of Porsches purchased in a lifetime. Be creative by using the data of the case and common sense. There is no magic formula. I will take your assumptions into consideration. c. Then the cost effectiveness can be assessed by comparing to competitive offerings Porsche sales increased by 4.55 ( 3000/658= 4.55 - p. 8) in 6 years. For a luxury brand, democratization of the product also means loss of prestige and exclusivity. Whitebook is a way to keep the luxury image of the brand by creating a special relationship with the best costumers. 20 million Yen represents 2.4% of the total marketing budget (p. 8). Assuming that an average price of Porsche is 75 000$ USD , in 6 years they have sold for 175 650 000$ (75 000 x 2320) . 20 million Yen is equal to 214 241.04$ USD which corresponds to 1 285 446.24$ USD in 6 years. In terms of break-even analysis and still assuming the average price of 75 000 $, they need to sell 3 cars (2.86) (214 241.04 / 75 000) per year to repay their investment in Whitebook. However, the case mentions that “10% of the VIP customers own 8-9 Porsches” (p. 8), therefore we can assume that Porsche company sells at least 3 cars per year and therefore sponsoring Whitebook is profitable. In terms of Costumer Lifetime value, we shall still assume the average price of 75 000$ USD per car and the number of Porsches purchased in a lifetime of 8.5 (“8-9 Porsches” own over lifetime - p. 8). The Costumer Lifetime Value is therefore equal to 637 500 (75 000 x 8.5). Finally, in terms of cost effectiveness, if we look at exhibit 9, we see that the manufacturer's suggested retail price of Whitebook is best advantageous compared to other selected print media in Japan. The manufacturer's suggested retail price is relatively low (5 000 000 Yen) compared to the number of pages and the location. Let’s take 25ans’. The MSRP is 4 200 000 Yen for 2 pages on the back cover; compared to 800 000Yen more for...
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